DALLAS - It might not have been the best time to start a business.
HO2 Partners, Dallas, launched its first venture cap fund in December 1999, just before the technology bubble burst. But the general partners, Daniel T. Owen and Charles B. Humphreyson, persevered and closed their first fund in December 2000 at $33.7 million.
"We decided to focus on software businesses in Dallas, because Dallas is a town of entrepreneurs, and we thought it would be a fertile area to find new ideas to fund," Mr. Owen said. "Even with the telecom meltdown, Dallas is the largest city in Texas for new ventures," Mr. Owen observed, adding that many venture funds will be focusing on ideas that are specialized both geographically and functionally.
Their fund has five companies in its portfolio, and three others were closed or sold when it didn't look as if they had a future. Typical of their investments is a $2.65 million stake in InnerWireless Inc. Dallas, an infrastructure business that improves reception for wireless voice and data communication in high-traffic public places. Its system is installed in New York's Rockefeller Center Concourse, said Mr. Owen. Investors in the fund include the $10 billion pension fund of British Airways, London, and Sevin Rosen Funds, Dallas.
Now HO2 is gearing up to raise a second fund of $75 million to $100 million, which will focus on early-stage software companies in the Dallas area.